South Korean investments providing 10% of Europe's transaction liquidity

South Korean investments providing 10% of Europe's transaction liquidity

Published at: 2019-09-23 12:33 | Author: CIJEurope.com
South Koreans invested a total of €6.2bn in Europe during the first half of 2019 and spent another €1.5bn in July. The half-year figure represented a jump of 13 percent compered to 2018 and amounted 10 percent of all cross-borer investments in Europe, according to a new report by Savills. The real estate agency explains the growing importance of investments from the country into non-core locations as an attempt to take care of attractive yields. But Savills writes South Koreans tend to be sensitive to long income on strong covenants. This has made Central Eastern Europe an attractive target, with recent deals including the South Korean REIT, JR AMC acquiring the Nordic Light Trio office building from Skanska for €41m and the newly developed Twin City Tower from HB Reavis in Bratislava for €120m. Continually falling yields, however, could have a dampening effect on transaction volumes. "The yield arbitrage between CEE and Western Europe has started to reduce in recent months and this could begin to dampen Korean appetite for further transactions if this downward yield trend continues," writes Savills. It also warns that if US interest rates come down in 2020, Korean investors could begin to "refocus their attention away from Europe."

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